Posted by PaulK on 10/30/07 12:09pm
Msg #218884

TAX QUSTION REF. NOTARY INCOME

Can someone please tell me where in the Tax code that income received from just notary fees is not subject to self employment tax. Also what tax form do you use to claim it. I have an IRS rep telling me that I have incorrect info, but I have read on here many times of notaries stating the notary fee portion is not subject. I think the IRS rep I am dealing with is new. Thank you.

Reply by MC_oh on 10/30/07 12:43pm
Msg #218889

If you check in the index of a Pub 17 or instructions for a Schedule C it will tell you that you subtract the income for services performed as a notary public on line 3 (write exempt-notary on the dotted line).
Remember it is only the state allowed fee for notarizing per signature that can be excluded from SE tax.

Reply by Doris_CO on 10/30/07 12:46pm
Msg #218891

The CPA we used last year wasn't aware of the exemption so I printed out the instructions for Schedule SE. You can go to IRS.gov and print out the instructions for Schedule SE and show him/her. The information is on page 3, in the middle column under "Income and Losses Not Included in Net Earnings from Self-Employment, #2. Only the charges for the notarization are exempt. You will still pay Self Employment tax on your profit from the signings minus the notarization charges.

Reply by CF on 10/30/07 12:53pm
Msg #218894

OK- I pulled my 2006 forms and looked this up. On my 1040 Line 58 Self Employment Tax attached Schedule SE- it says Exempt- Notary. I use an on-line tax program...when doing my Schedule C it promtps me for this information and I think it asks is you are a minister/clergy or a notary public. So you should refer to Schedule SE. Additionally, you should be able to look it up on IRS.gov by typing in Notary Public or Self Employment tax exemption. Hope this helps.

Reply by SharonMN on 10/30/07 1:09pm
Msg #218895

RE: The CPA we used last year wasn't aware of the exemption so I printed out the instructions for Schedule SE. You can go to IRS.gov and print out the instructions for Schedule SE and show him/her.

I do all my own taxes. It's a simple matter to follow the instructions and fill out the form, and it's sad that an accounting expert isn't able to follow instructions which were published by the IRS for the general public to use.

Reply by Linda_H/FL on 10/30/07 1:19pm
Msg #218896

Sad but true - and that's not the first time I've heard that statement in reading these boards - it would appear many tax preparers and accountants are unaware of this exemption.

Reply by PaulK on 10/30/07 1:58pm
Msg #218905

Thanks for all of the responses. It was a big help.